Does Your Insurance Still Cover Your Cruise? Always Check.

(Updated 1:55 p.m. EDT) -- Buying trip insurance for a cruise is almost an automatic reaction for many cruisers, particularly during these uncertain times. Some readers, however, have discovered that some insurance providers are no longer interested in covering their cruise vacations from unexpected interruptions and cancellations.

In a move that raised more questions than answers, the travel insurance company Allianz recently removed several cruise lines from its list of covered providers at the end of August. The removed lines include Crystal Cruises, Windstar and American Queen Steamboat Company, all of which are no longer covered in the event of a financial default, though other forms of insurance still apply.

When an insurance company declines to cover a travel provider, there's often an assumption that the insurer believes that the dropped tour company or cruise line is in financial trouble or close to bankruptcy or default. 

But Allianz states that's not the case here.

"A travel supplier's inclusion on or exclusion from our Covered Supplier List is not a comment on or a judgment of that supplier, financial or otherwise," an Allianz representative wrote in an email to Cruise Critic. "And, as mentioned, there are other terms, conditions, and exclusions that apply to our plans, so we always would encourage customers to read their plan for details and to contact us with questions about their specific circumstances."

Allianz provides coverage for most major cruise lines catering to Americans, including Carnival, Norwegian, Royal Caribbean, Viking and others. The full list of covered suppliers can be found here.

"While Allianz has affiliated with Windstar in the past for travel insurance, Windstar currently offers direct travel coverage through Aon Affinity,” said Andrew N. Todd, CEO of Windstar Cruises, told Cruise Critic in an email. Windstar is part of the Xanterra Travel Collection and is under the umbrella of companies owned by the Anschutz Corporation.

"A Known Event"

While insurers say that not being on a list doesn't necessarily count as a vote of non-confidence against the financial health of a company, having it removed doesn't inspire confidence for the traveling public. This is particularly true at a time when cruisers are in need of reassurance that their cruise vacation deposits are sound.

"Our travel protection plans typically cover unforeseen covered reasons that result in trip cancellations or interruptions, travel delays, medical emergencies, and more, subject to the plan's terms, conditions and exclusions," an Allianz spokesperson told Cruise Critic in an email. 

"Certain plans include a specific covered reason for trip cancellation/interruption due to the customer's travel supplier ceasing all operations due to its financial condition.  One of the conditions for that covered reason is that the supplier must have been included on our Covered Supplier List as of the customer's plan's effective date."

Essentially, customers would be covered for trip interruptions and cancellations on the affected cruise lines -- but not for a situation where the line goes bankrupt.

The company's guidance regarding the COVID-19 coronavirus outbreak also provides a look into what is known in the insurance industry as "a known event."

"Travel insurance is intended to cover losses arising from sudden and unforeseeable circumstances," notes a statement on the Allianz website. "Any claims resulting from events known to you when purchasing your insurance are not covered."

When an event becomes "known" is largely at the discretion of the insurance provider. In the case of Allianz, it considered COVID-19 to be a known event as of January 22, 2020. Individuals who purchased insurance before this date would have their trips covered if they were canceled due to coronavirus.

Travelers purchasing insurance on or after that date would not be covered in the event of a COVID-19-related cancellation.

Is My Cruise Covered or Not?

Regardless of which insurer has underwritten your cruise vacation, it is crucially important to read your policy thoroughly and to understand any updates that might be in place on the insurer's website to determine what you are covered for.

For example, customers who insured their trip with Allianz before August 28, 2020 -- the date when the lines in question were removed -- should still be covered by the company.

Credit card companies should also provide a modicum of protection should a company go out of business.

"Financial Default" coverage is typically included in trip cancellation and interruption insurance policies and is often separate from third-party medical insurance that covers you in the event of an accident or injury. 

Trip cancellation and interruption insurance typically has to be purchased at the time of booking, though some insurance providers allow for up to 21 days after the original booking is made to add it. It cannot be added retroactively.